September 19th, 2016
Small-commercial business presents a great opportunity for an independent agent to grow his or her agency.
With $81 billion in premium and 31 million small businesses in the United States, one can’t commute to the office without passing any number of small businesses along the way. Yet, too many agents do just that. Much like washing one’s hair, a simple planned process can help agents tap into this potentially lucrative market.
Independent agencies are small businesses, and as such, the owner-agent should understand the needs and demands of running a business that size. We all know insuring the business is an important part of running it; both the owner and employees rely on the business to succeed and grow.
Small-business owners are not only protecting their business, but also protecting the asset that funds their personal life. Small-business owners may be experts on whatever business they are in, but the agent is the expert when it comes to insurance. Business owners may research their business insurance needs online to try to educate themselves on coverages and insurance terms, but agent discussions, counseling and recommendations will make sure the business is covered properly.
Research: Know Your Customer
To win this business, agents have to do their part. Completing an apples to apples quote by simply taking a prospective small business’ policy and going back to the office is not selling. Agents must take the time to research and understand the small business before approaching it. They should take the time to discover the particular needs of that business on an individual basis and give that client the proper level of service he or she deserves. Keep in mind, identifying a client’s needs and conveying that information may not be as simple as it sounds. Prospects may not understand what they need and how different policies interrelate. Give them time to contemplate and understand the proposal, as they have the power to say yes or no to the business.
Make a Plan of Approach
So what is the formula for success with small-business clients? Consider developing a plan to go after small-commercial business, like the following:
• Make a list of qualified prospects, not just names on a page.
• Introduce the agency. Consider mail, cold calling or social media and determine key messaging.
• Understand the carrier products and specific endorsements for the small-business prospect.
• Set geographic boundaries for prospective clients — how far will you travel for a small commercial opportunity?
• Know your competition.
• Have a plan to follow up.
Understand Carrier Offerings to Propose the Perfect Package
In addition to having a plan, agents should also know their carriers’ products to put them in the best position to win client business. This is not rocket science, but it requires conscious thought.
Carrier products can vary, so agents need to know them inside and out. For example, if an agent were to replace the current carrier’s business owner’s policy with a new carrier’s business owner’s policy, he or she must first match coverages and have a solid understanding of the products to make sure the small business is properly covered. It’s also essential for the agent to have a firm understanding of the client’s current coverage to avoid any gaps in coverage.
When an agent gets the opportunity to meet with clients, those clients want to see that the insurance agency and the carriers it represents can accommodate their insurance needs.
Again, research prospects before the first meeting. That time together is not just for them to see if they want to do business with that agent, but also for the agent to see if he or she wants to do business with them.
Consider the following:
• Are they the right client for this agency?
• Do they have any issues (claims, non-payment)?
• Does the business seem to be run properly?
• Is it a business with which the agency would do business?
Small commercial is a flow business, and if an agency takes on a client with issues, that client has the potential to be a distraction to the entire agency. Therefore, it pays for agents to invest time in the beginning to make sure that this business is one with whom they want to have a long-term relationship.
The Formula for Success
For some agencies, working with small commercial insurance is like winning a participation trophy; everyone gets one.
Most agents have some small-commercial business, someone they know, maybe a walk-in client or a personal lines client who owns a business. However, the agency that has a plan to market to a small-commercial account,a plan to introduce the agency and its services, and a process in place to service that business gets the first place trophy.
With small commercial being a profitable and stable business, that first place trophy means revenue and growth for the agency.
Small-commercial business is a great segment of the market to be in, and an agency can grow and grow. But, it also can be very frustrating and expensive if the agency doesn’t work smarter and invest a little time on the front end.
I tell agents whom I work with that if they have a small-commercial account knocking on their door and it’s not a referral or someone they know, lock the door and shut off the lights. It’s very likely a distressed account that has been knocking on many doors before theirs (yours).
Use a repeatable, planned process that identifies and qualifies real opportunities and incorporates your understanding of the carriers’ products to offer the right product for that particular business’ needs. Lather, rinse and repeat.
By: Steve Tombarelli, VP of Strategic Insurance Agency Alliance (SIAA)